HIPAA Transactions and Code Set Standards As of January 2012. Frequently Asked Questions

HIPAA Transactions and Code Set Standards As of January 2012 Frequently Asked Questions Version 20 Rev 11222011

Frequently Asked Questions: HIPAA Transactions and Code Set Standards One of the most prominent challenges our customers face in transitioning to ASC X12 version 5010 and NCPDP D0 is in identifying the gaps between the versions Many of the challenges facing the healthcare industry are not technical in nature, but address the business Because of our commitment to guiding our clients through this transition, we published gaps and FAQs for each transaction set on Emdeon s HIPAA Simplified site These documents are updated regularly and include the Addendum (Errata) changes Please refer to this documentation if you need answers other than those provided below 1 What is version 5010 of the X12 HIPAA Transaction and Code Set Standards? HIPAA ASC X12 version 5010 and NCPDP version D0 are new sets of standards that regulate the electronic transmission of specific healthcare transactions, including eligibility, claim status, referrals, claims, and remittances Covered entities, such as health plans, healthcare clearinghouses, and healthcare providers, are required to conform to the new transaction set standards The current transaction standard for eligibility, claim status, referrals, claims, and remittances is the ASC X12 version 4010 For pharmacy claims, the current standard is NCPDP version 51 Use of the 5010 version of ASC X12 and the NCPDP D0 standard is required by federal law The compliance date for use of these standards is January 1, 2012 2 Who will need to upgrade? All covered entities, listed below, are required to upgrade to standards Covered entities may use a clearinghouse to assist them in complying with the rules Physicians Hospitals Payers Clearinghouses Pharmacies Dentists Additionally, even though software vendors are not included in the list of covered entities, in order to support their customers they will need to upgrade their products to support ASC X12 version 5010 and NCDPD D0 as a business imperative 3 What transactions are specified in the new standards? Transaction Name Health Care Eligibility Benefit Inquiry and Response Health Care Claim Status Request and Response Health Care Services Request for Review and Response Health Care Services Notification and Acknowledgment Set ID(s) GS08 270/271 005010X279A1 X217 276/277 005010X212 X212 278 005010X217 X215 278 005010X216 X216 X12 TR3 Document ID 2011 Emdeon Business Services LLC All Rights Reserved Page 1

Transaction Name Set ID(s) GS08 Payroll Deducted and Other Group Premium Payment for 820 005010X218 X218 Insurance Products Benefit Enrollment and Maintenance 834 005010X220A1 X220 Payment/Advice 835 005010X221A1 X221 Professional 837 005010X222A1 X222 Institutional 837 005010X223A1 X223 Dental 837 005010X224A1 X224 NCPDP Pharmacy Claim D0 n/a n/a 4 What transactions will Emdeon support? Emdeon will support the following new versions of the transactions: Transaction Name Set ID(s) GS08 X12 TR3 Document ID Health Care Eligibility Benefit Inquiry and 270/271 005010X279A1 X217 Response Health Care Claim Status Request and Response 276/277 005010X212 X212 Health Care Services Request for Review and 278 005010X217 X215 Response Health Care Services Notification and 278 005010X216 X216 Acknowledgment Payment/Advice 835 005010X221A1 X221 Professional 837 005010X222A1 X222 Institutional 837 005010X223A1 X223 Dental 837 005010X224A1 X224 NCPDP Pharmacy Claim D0 n/a n/a 5 Where can the Technical Reports (Implementation Guides) be obtained? X12 TR3 Document ID The Technical Reports (TR3 Documents) and their addenda are available for purchase in the X12 Store located at http://storex12org/ The NCPCP Documents are available for purchase on the NCPDP Website: http://wwwncpdporg/standards_purchaseaspx 2011 Emdeon Business Services LLC All Rights Reserved Page 2

6 What are the major differences between ASC X12 versions 4010 and 5010? There are changes across all of the transactions, some of which include The ability to support new-use cases brought forward by the industry, Clarification of usage to remove ambiguity, Consistency across transactions, Support of the NPI regulation, and Removal of data content that is no longer used 7 Why was it necessary to update the standards? The HIPAA upgrade was needed for several reasons, including: To implement some unanticipated issues and requirements version 4010 uncovered To accommodate the forthcoming and mandatory ICD-10-CM and ICD-10-PCS code sets, which are scheduled to be implemented on October 1, 2013 8 How can covered entities prepare for the transition to the new standards? An organization should make it a priority to perform a thorough systems inventory to establish which technical and business components will be impacted by the new version In the analysis of business components, the organization should also review the readiness of their business partners, including clearinghouses, software vendors, and so forth, to confirm that they are also prepared to transition by the compliance date Additionally, covered entities should perform a full internal gap analysis between the current HIPAA standard and the new standard To aid the industry in realizing compliance, Emdeon has provided gap analyses on the HIPAA Simplified site for each HIPAA standard transaction that we support 9 Are there any milestones published by HHS to help organizations meet the compliance dates? Yes In the preamble to the Final Rule, HHS has recommended a timeline to help the industry migrate to the new versions of the transactions: Target Date Milestone Jan 2009 Begin Level 1 activities (gap analysis, design, and development) Jan 2010 Begin internal testing for HIPAA 5010 and NCPDP D0 Dec 2010 Achieve Level 1 compliance (covered entities have completed internal testing and can send and receive compliant transactions) Begin Level 2 testing period activities (external testing with trading partners and move into production; dual 4010A/5010 Jan 2011 processing mode) Begin initial ICD-10 compliance activities (gap analysis, design, development, and internal testing) Jan 1, 2012 5010/D0 compliance date for all covered entities Oct 1, 2013 The compliance date for ICD-10-CM and ICD-10-PCS 2011 Emdeon Business Services LLC All Rights Reserved Page 3

10 What action is Emdeon taking to address the modifications to the HIPAA transactions and code sets and the transition to ASC X12 5010 and NCPDP D0? Emdeon initially performed a thorough gap analysis, the results of which helped to create a database of issues and challenges; we continually compile educational solutions for our customers with these issues and challenges This information is available at wwwhipaasimplifiedcom, including information for each of our business segments (physicians, hospitals, payers, pharmacies, dentists, and channel partners) Additionally, the site will provide ample resources for helping our clients perform their own gap analyses 11 Will Emdeon support the ASC X12 5010 versions of the acknowledgement transactions? Yes, Emdeon will support the full set of ASC X12 version 5010 acknowledgement transactions: TA1 Interchange Acknowledgment X230 Functional Acknowledgment For Health Care Insurance (997) X231 Implementation Acknowledgment For Health Care Insurance (999) X214 Health Care Claim Acknowledgment (277) X824 Acknowledgement Response Emdeon will provide guidance documents about our support of the acknowledgment transactions 12 How will the late introduction of the Errata changes impact trading partner readiness and testing plans and schedules? Most organizations will begin testing only after developing for the Errata versions The already narrow testing window is further constricted with the release of the Errata so late in the timeline 13 What transactions changed with the release of the ASC X12 version 5010 Errata? Below is the list of ASC X12 version 5010 transactions for which the Errata was approved by ASC X12 and adopted by HHS as the standard in October 2010 Transaction Name Set ID(s) GS08 Health Care Eligibility Benefit Inquiry and 270/271 005010X279A1 X279 Response Payment/Advice 835 005010X221A1 X221 Professional 837 005010X222A1 X222 Institutional 837 005010X223A1 X223 Dental 837 005010X224A1 X224 Implementation Acknowledgement For Health Care Insurance 999 005010X231A1 X231 X12 TR3 Document ID 2011 Emdeon Business Services LLC All Rights Reserved Page 4

Emdeon completed a gap analysis of the changes for all transactions except the 999 The gap analysis documents are posted on the HIPAA Simplified web site for everyone s use 14 Has Emdeon begun beta testing yet? Yes Emdeon initiated submitter and payer beta testing (on the Errata versions where applicable) in February 2011, in advance of the CMS recommendation to start Medicare Errata testing on April 1, 2011 We facilitated testing the new standards with several submitters and payers for 837 Professional, Institutional, and Dental, as well as on the 835, 270/271, 276/277, and 278 transactions 5010 Testing Transaction Submitters Payers 837 Professional Yes Yes 837 Institutional Yes Yes 837 Dental Yes Yes 835 ERA Yes Yes 270/271 Eligibility Yes Yes 276/277 Claim Status Yes Yes 278 Referral/Authorization Yes Yes Transaction NCPDP D0 Testing Submitters Claims Yes Yes Payers 15 Are you on schedule to go into Production with the new standards? Yes We are currently in Production on 837 Claims, 835 ERAs, and 270/271 Eligibility 16 Why are there not more payers in Production with 5010 when CMS suggested Level 2 testing in January 2011? That guidance was issued in a timetable released by HHS with the 5010 Final Rule in January 2009 Emdeon was in fact testing with early submitters and payers on the 5010 Final Rule transactions in the fall of 2010, ahead of the January 1, 2011 date However, with the very late introduction of the 5010 Errata changes in October 2010, covered entities had to go back and build the 5010 Errata versions Most payers did not start testing on the Errata versions until earlier this summer Of those in testing, most tested claims only and had not begun testing ERAs, Eligibility, or Claim Status Currently, Emdeon is testing the Errata transactions with a significant number of payers 2011 Emdeon Business Services LLC All Rights Reserved Page 5

17 When will ERAs be available in the ASC X12 version 5010 format? Emdeon systems are currently prepared to accept the new ERA format For more information, you may contact your support representative or complete an Emdeon On24/7 ticket 18 Did any issues surface during your payer testing that could be prevented easily? Yes The following table describes some of the most common issues found in 837 and 835 testing Transaction Challenge 837 (all) Situational in 4010 now Required in 5010 Many fields are now required in 5010 Emdeon recommends a thorough review of the USE CHANGE REPORT section of the transaction s Gap Analysis documentation on our HIPAA Simplified site for the Transitional Issues items Accepts Assignment Indicator The Accept Assignment definition has changed to Assignment or Plan Participation Code, to represent the providers relationship with any health plan, not just Medicare only Patient Name The patient s name changed from Required to Situational in 5010 Patient Relationship Code The allowable Patient Relationship Codes have been reduced down to their pre-4010 level of eight in ASC X12 version 5010 The codes should be validated prior to submission Release of Information Code To align with Privacy Rules, HIPAA now only allows values of I (Informed consent) or Y (Yes, signed release) Educate your providers to use only I or Y and not A, M, N, or O Zip Code The Billing Provider and Service Facility Zip Code values must be reported using the full nine digits in the new version 837 (Prof/Inst) Billing Provider Address The Billing Provider Address must be reported using a unique physical location instead of PO Box information in the new version This change may require enrollment updates and payers should be contacted proactively regarding updating address information to avoid any adverse affect on reimbursements 837 (Prof) Diagnosis Code Changes Each transaction may include up to twelve Diagnosis Codes in 5010 This increase from the eight occurrences allowable in 4010 is to prepare for the future conversion to ICD-10 In addition, 5010 requires at least one Diagnosis Code on each claim 2011 Emdeon Business Services LLC All Rights Reserved Page 6

Transaction Challenge During the transition period, Emdeon recommends that providers limit the use of Diagnosis Codes to the number currently supported by a payer This will avoid rejections from payers who have not yet enhanced their 5010 systems to accommodate twelve Diagnosis Codes 837 (Inst) Principal/Other Procedure Codes The use of HCPCS codes is not valid at the claim level and is no longer allowed in the new version Only ICD-9 PCS or ICD-10 PCS codes are allowable in the new version 835 ERA Patient Name Because the patient s name changed from Required to Situational in version 5010 of the 837 transactions, providers should be prepared to receive 5010 remittance advices without a Patient Last Name for Retail Pharmacy claims and Patient First Name on all claims Claim Adjustment Group Code HIPAA no longer allows CR, the Correction and Reversals code, to be used in the Claim Adjustment Group Code set in 5010 Claim Adjustment Group Code HIPAA no longer allows CR, the Correction and Reversals code, to be used in the Claim Adjustment Group Code set in 5010 Service Identification (REF) The number of Service Identification segments increased from seven to eight in 5010 Providers should be prepared to accept all eight segments The information above provides just a few examples of issues that developed during ASC X12 version 5010 payer testing of the 837 transactions For a more robust listing for 835 and 837 transactions, please visit the Emdeon HIPAA Simplified website under the Business Documentation section of the Downloads page 19 How do you anticipate the new standards will impact your customers? It is imperative that providers work with their software vendors to ensure that the data they send allows us to create a compliant transaction There will also be a certain degree of business impact, which we have outlined in our Issues & Challenges documents on HIPAA Simplified Just as with the ASC X12 version 4010 and NPI implementations, Emdeon will facilitate trading partner readiness using a variety of tools and educational materials, including HIPAA guidance reports and implementation roadmaps 2011 Emdeon Business Services LLC All Rights Reserved Page 7

20 Will there be any impact to existing service levels because of the transition? No Emdeon began testing well in advance of the timelines to minimize the chance of any service level disruptions 21 Will the release strategy allow for processing transactions in both the old and the new standards during the transition period? Yes Just as we did with the transition to ASC X12 version 4010, Emdeon will be prepared to accept version 4010 from submitters and convert it to version 5010 for payers that are ready Similarly, if a provider is ready to send 5010 transactions, Emdeon will be prepared to convert them to version 4010 for payers that are not yet ready and send in version 5010 to those payers who have already converted 22 How can clients receive the status on each payer s readiness? Payers that are accepting 5010 format will be noted as such on the Emdeon Payer List, located at wwwemdeoncom/payerlists 23 We may not complete our ASC X12 version 5010 development in time Can we still submit version 4010 to Emdeon after the compliance date? As discussed, Emdeon, as a clearinghouse, will continue to accept ASC X12 version 4010 and convert to version 5010 as needed by clients We have not set a timeframe on that service, but Emdeon does encourage all trading partners to convert to version 5010 to meet the transaction standards and to prepare for ICD-10, which can only be transmitted in the 5010 standard transactions 24 Do I have to change my inbound file format if I am using Claim Master? On January 1, 2012, HIPAA will require that you update the manner in which you submit claims to use the new HIPAA ASC X12 version 5010 standard format While Emdeon encourages all providers to be ready to submit claims using the new standards in advance of the deadline, we want you to be aware that Emdeon Claim Master can make your claims compliant without requiring you to upgrade your system If you plan to change your inbound claim file to a 5010 format please complete an Emdeon On24/7 request or contact your support representative in order to get scheduled for testing Note: The Claim Master Legacy and HBS products are NOT being modified to be version 5010 compliant Customers on these products will be migrated to Claim Master Web- Native to meet 5010 requirements by December 31, 2011 25 How will paper claims be handled? (Clearinghouse and OCR vendors) Emdeon will enhance paper claims processes in accordance with the guidance from the NUBC/NUCC/ADA We will adhere to any guidelines set forth by the committees for paper claims Our print and scanning operations will adhere to the guidelines defined by the maintainers of the paper forms 2011 Emdeon Business Services LLC All Rights Reserved Page 8

26 Will Emdeon continue to support the Site ID in the 5010 837? Yes Even though Emdeon will no longer require that submitters send the Site ID in the version 5010 837 claim file, we will continue to accept the Site ID information in the 2010AA REF G5 from submitters that will still need reports distributed based on the Site ID Emdeon will not include the Site ID on the outbound claim file to the payer 27 Who should customers contact with questions about the new standards? Emdeon has structured our transition communication plan so that our clients are able to obtain pertinent information as quickly as possible To facilitate an expedited question/response process, a client should complete an Emdeon On24/7 ticket or present any inquiries to their knowledgeable Emdeon Account Manager, who will ensure that the inquiry is responded to in a timely manner In addition, the HIPAA Simplified web site contains information critical to any implementation at no cost to the viewer HIPAA Simplified is a one-stop online resource that features technical gap analysis, simplified business level documentation, timelines for the transition and testing information 28 Does Emdeon hold any leadership roles in the healthcare industry? Absolutely Emdeon is a leader in the industry and holds a number of positions with healthcare organizations, including WEDI, X12, NCPDP, and IAABC Emdeon is a member of the WEDI Board and participates as leaders in the HIPAA 5010 and ICD-10 workgroups and forums Emdeon also maintains leadership positions in X12N Workgroups that focus on the HIPAA transactions Regarding our role with X12, we have focused largely on the migration to HIPAA 5010 In WEDI, we have employees who serve as co-chairs on two panels and others who closely track the work being done by another panel With IAABC, we have an employee who is the X12 Liaison to the Medical EDI Committee within IAIABC Emdeon is represented on several NCPDP workgroups 2011 Emdeon Business Services LLC All Rights Reserved Page 9